Government Policy

Activists tend to remember landmark victories in the fight against air pollution. But most people would be surprised to hear that it is 25 years since the government took a policy decision which, according to researchers, made a difference to air quality overnight. That was to impose a cap on the sulphur content of industrial fuel used in factories. The year was 1990. Ever since, sadly, other pollution sources have undermined air quality. But a similar landmark victory may not be far off, according to a think tank that specialises in environmental issues. Simon Ng Ka-wing, chief research officer at Civic Exchange, says this is likely when it becomes mandatory for ocean-going vessels to use low-sulphur marine diesel fuel when berthing in Hong Kong, under a proposed law that activists hope will take effect as early as July. Although ship emissions account for only 18 per cent of sulphur dioxide in the city’s air, they penetrate residential areas easily.

As with the factories in 1990, Ng expects the policy to have a dramatic effect because sulphur emissions will be cut by almost 80 per cent immediately. This is the kind of boost to its environmental credentials the city needs, given the importance of good air quality in attracting the talented people and tourists so important to its economy. The latest data shows that measures such as phasing out dirty diesel vehicles and buses that fail even outdated European emission standards are having a welcome impact. But average concentrations of pollutants remain too high, especially for ozone.

The ultimate goal of tackling marine diesel emissions in Hong Kong is a recognised clean-fuel emissions control area (ECA) for the Pearl River Delta, like those in North America, the Baltic Sea and the North Sea. That would depend on participation of Guangdong ports and support from Beijing in the International Maritime Organisation. Meanwhile, if a mandatory cap were to have the predicted dramatic effect, it should prompt the government to redouble efforts to upgrade local bus and truck fleets to combat roadside air pollution.

Hong Kong financial secretary John Tsang has announced a proposal to
lower port dues to encourage ships to switch to cleaner fuels while at
berth in Hong Kong.

“To encourage more carriers to switch to cleaner fuels when berthing in
Hong Kong waters, I propose to reduce by half the port facilities and
light dues charged on ocean-going vessels using low sulphur fuel while
at berth in Hong Kong,” Tsang said in his 2012-2013 budget speech on
Wednesday.

He added that the incentive, which will span three years, will cost the
government HK$260 million ($41.2 million).

In his speech, Tsang highlighted a shipowners’ initiative to switch to
cleaner fuels in Hong Kong under the Fair Winds Charter agreement, which
is effective from January 1, 2011 to December 31, 2012.

“While developing its services, the shipping industry is also very
concerned about environmental protection,” he said.

The Hong Kong Liner Shipping Association (HKLSA) in November last year
called for the local government’s support on the fuel switch efforts in
view of rising bunker fuel prices.

HKLSA Secretary Roberto Giannetta said then that the shipping companies’
ability to continue to “solely absorb” the increasing cost over an
extended period of time is “very doubtful.”

Following is a question by the Hon James To and a written reply by the Secretary for the Environment, Mr Edward Yau, in the Legislative Council today (December 14):

Question:

Will the Government inform this Council:

(a) given that the Government has earlier indicated that the pilot scheme for promoting the use of cleaner fuels for local ferries has been completed, of the expected time when it will submit the outcome of the pilot scheme to this Council and for public consultation; moreover, given that the Government has indicated that it has completed the consultation on regulating emissions from non-road mobile machinery which is widely used in places such as container terminals, etc. and it plans to commence the work of enacting legislation in 2012, when the related legislative procedures are expected to complete; of the anticipated improvement in air quality of various districts across the territory upon implementation of the aforesaid scheme/plan;

(b) given that the Chief Executive has proposed in his Policy Address of this year that the Government will explore with the Governments of Guangdong, Shenzhen and Macao proposals for requiring ocean-going vessels in Pearl River Delta (“PRD”) waters to switch to low-sulphur diesel, and setting up an Emission Control Area in PRD waters, whether it knows how the existing regulatory controls over vessel fuels and their emission levels of Hong Kong, Macao and the Mainland compare with one another; whether liaison and meetings with the Mainland and Macao on the relevant subject matter have commenced; in addition, of the expected time when such proposal can be implemented;

(c) given that in response to my question in 2007, the Government indicated that “there is yet to be an internationally-recognised standard for shore power supply and facilities on board for the shipping industry”, thus the proposal of providing shore power supply in public cargo working area or other berthing facilities was considered not practicable for the time being, whereas as far as I understand, there are already more than 15 ports around the world which provide shore power, among which the Port of Shanghai has provided shore power service since last year, and relevant planning has been underway in a number of ports in Taiwan, whether the Government has, in the light of the latest development in various places, started afresh any study in this regard, or liaised with mainland, Taiwan or even international organizations of the trade to understand the relevant technological development as well as to discuss with them the formulation of trade standards; if it has, of the progress;

(d) given that provisions have been made in the design of the Kai Tak Cruise Terminal for the use of shore power in future, whether the Government will consider making additional provisions of the same kind at the Kwai Chung Container Terminals, or initiating pilot schemes on the supply of shore power at various cargo working areas;

(e) since the implementation of the Merchant Shipping (Prevention of Air Pollution) Regulation (Cap. 413M) (“the Regulation”) in 2008, whether there has been an increasing trend of merchant ships violating the Regulation; and up till now, of the number of spot checks conducted by the Marine Department each month, and the number of cases in which the owners concerned were convicted for excessive smoke emissions by their vessels, as well as the fines imposed; and

(f) apart from the measures in (a) to (e), whether the Government has other plans to regulate the emission of pollutants by vessels and container terminal facilities; whether the Government will make reference to the “Green Port” policy introduced by the Mainland and neighbouring regions one after the other to reduce emissions and pollution, and initiate related studies and plans?

Reply:

President,

With successive implementation of land-based control measures, we have seen improvement in the local air pollution. For example, from 2005 to 2010, our local air quality monitoring stations recorded a decrease in the concentrations of sulphur dioxide (SO2) and respirable suspended particulate (RSP) by 45% and 18% respectively. Due to the increase in the maritime activities in Hong Kong and the PRD Region, emissions from the marine vessels have gradually become another source of air pollution. We need to step up our effort to reduce emissions from this source in order to further improve our air quality. The reply to the questions raised by the Hon James To is as follows:

(a) At present, the light diesel supplied on the local market to marine vessels contains not more than 0.5% sulphur. If the sulphur content is capped at 0.1%, the territory-wide emissions of SO2 and RSP will be reduced by around 3%. We have thus completed a trial of powering local ferries with ultra low sulphurdiesel and will report on the trial findings and consult the Panel about improving the quality of vessel fuels sold locally at the meeting of the Legislative Council Panel on Environmental Affairs (the Panel) on December 21.Meanwhile, we have started seeking relevant stakeholders’ views on this proposal.

As for the introduction of statutory control on the emissions of non-road mobile sources (including mobile machinery used at container terminals, airport, construction sites, etc.), we have consulted the trades on our proposal. We plan to report to the Panel on the outcome of the consultation and consult it on the final proposal in the first quarter of 2012. Subject to the Panel’s support, we shall commence the necessary legislative procedures for implementing the control proposal which is expected to complete within the 2012-13 legislative session.

Emissions from non-road mobile machinery currently account for about 7% (6,800tonnes) and 11% (600 tonnes) of the local emissions of nitrogen oxides (NOx) and RSP respectively. If all non-road mobile machinery in local use are replaced with ones meeting the proposed emission standards, local emissions of NOx and RSP can be reduced by 4.7% (4,500 tonnes) and 9% (500 tonnes) respectively. It will also help mitigate the environmental nuisance generated at container terminals and construction sites near the urban centres.

(b) Hong Kong, Macao and the Mainland control marine emissions within their waters through implementing the requirements of the Annex VI to the International Convention for the Prevention of Pollution from Ships promulgated by the International Maritime Organisation. These include restriction of fuelsulphur contents, control of emission of NOx and ozone-depleting substances, and regulation of shipboard incineration.

We have started discussion with the relevant authorities of Guangdong, Shenzhen and Macao on the regional cooperation initiatives on reducing marine emissions within the PRD waters set out in the 2011 Policy Address. We will jointly explore the feasibility of these initiatives and the way to take them forward.Meanwhile, we are also consulting the local stakeholders, including the oil companies, ship owners and the shipping industry about the proposed control initiatives, which would help us consider and work out the implementation timetable as soon as possible.

(c) and (d) The design of the Kai Tak Cruise Terminal has already made provisions for the use of onshore power supply (OPS) in future. We will keep closely monitoring the progress in the development of internationally harmonized technical standards for OPS and the trend of other overseas ports in using OPS, with a view to installing relevant facilities in the cruise terminal as soon as possible.

As for container terminals, since container vessels have a shorter berthing time, switching to low-sulphur diesel is more cost-effective than using OPS. We will continue to listen to the views of the industry and closely monitor the trend of overseas container terminals in using OPS to decide whether there is a need to require container terminals to install relevant facilities.

(e) The Marine Department has not found any increasing trend of non-compliance cases of vessels since implementation of the Merchant Shipping (Prevention of Air Pollution) Regulation in 2008. Dark smoke emission from ocean-going vessels is regulated under the Shipping and Port Control Ordinance, whereas that from local vessels is regulated under the Merchant Shipping (Local Vessels) Ordinance. As at November 2011, the Marine Department has carried out around 3 600 surprise inspections (on average 330 inspections per month) on vessels in Hong Kong waters in relation to air pollution. Since 2008, the Marine Department has prosecuted five vessels for excessive emission of dark smoke causing nuisance. All of these vessels were convicted and the level of fine for each case ranged from HK$500 to HK$2,500.

(f) The Chief Executive proposed the use of clean fuels for marine vessels in this year’s Policy Address. The proposed measures include:

(i) explore with the governments of Guangdong, Shenzhen and Macao the feasibility of requiring ocean-going vessels to switch to low-sulphur fuel while berthing at ports of Hong Kong and the PRD;

(ii) explore with the governments of Guangdong, Shenzhen and Macao setting up an Emission Control Area in PRD waters over the longer term; and

(iii) study in collaboration with the relevant trades the feasibility of improving the quality of vessel fuels sold locally to reduce emissions from vessels.

We are actively following up the above proposed measures in order to reduce vessel emissions.

On the other hand, many major ship liners in Hong Kong signed up to the Fair Winds Charter (the Charter) in January this year, committing to switching to lowsulphur fuel as far as possible when berthing in Hong Kong waters within 2011 and 2012. The Charter has not only reduced the emissions generated from the marine vessels around the port area, but also demonstrated the feasibility of fuel switch in Hong Kong waters, which would help us explore extending fuel switch to the whole PRD waters.

Regarding other measures to reduce emissions from container terminals, it is now a statutory requirement that the sulphur content of diesel used by non-road mobile sources (including mobile machinery and non-road vehicles) at container terminals must not exceed 50ppm (i.e. ultra low sulphur diesel). Emission reduction is also attained by switching most quay cranes to electric power, and converting more than half of the diesel-driven gantry cranes into electric or hybrid cranes. In addition, some non-road vehicles used at container terminals have been replaced by electric or hybrid models to help improve the air quality and environment of the port.

point in the journey from factory to store shelves, as much as 90% of the world’s shipped goods spends time on board a ship. For places like Los Angeles and Long Beach, the good news about this supply chain reality is that the biggest seaports handle the most cargo and get the greatest number of generally well paying jobs.

The bad news is also sizeable. Cargo ships at sea burn what can only be described as the — in the words of one research chemist — “bottom of the barrel” grade of fuel, also known as bunker.

“Bottom of the barrel is literally what bunker fuel is. It’s what the refineries have left after all of the cleaner burning fuels — aviation, gasoline, diesel — has been produced. It’s the sludge at the bottom where all of the bad stuff concentrates, all of the sulfur and the heavy-metal compounds,” said chemist Dan Lack, who works with with the National Oceanic and Atmospheric Administration’s Earth System Research Laboratory and the Cooperative Institute for Research in Environmental Sciences.

But Lack and his associates have some data that might literally help those who live near California’s major seaports breathe a little easier: When cargo ships slow down and switch to a cleaner-burning fuel as they approach shore, the reduction in pollution levels is startling.

Their study of a Maersk cargo container ship operating under California’s 2009 near-shore, low-sulfur fuels regulation and the state’s voluntary slowdown policy found that emissions of several health-damaging pollutants, including sulfur dioxide and particulate matter, fell dramatically. The ship was the Margrethe Maersk.

Sulfur dioxide levels fell 91%. Sulfur dioxide emissions can lead to the formation of particulate matter in the atmosphere that poses serious public health concerns. Particulate matter pollution, which can damage people’s lungs and hearts, dropped 90%.

Lack said the study was important because it involved a case in which a regulation wasn’t ignored after it was enacted.

“It’s important to know that the imposed regulations have the expected impacts. The regulators want to know, the shipping companies want to know, and so do the people,” Lack said.

Photo: The container ship Margrethe Maersk steams toward California in May 2010. Credit: National Oceanic and Atmospheric Administration and Cooperative Institute for Research in Environmental Sciences

New international rules on maritime industry’s energy efficiency will help owners cut costs and save on fuel, according to carbon lobby group

The shipping sector could become cleaner than the aviation industry following the approval by the UN shipping agency of a new energy efficiency design index and other measures aimed at improving ships’ environmental performance, according to an NGO.

The new rules, adopted by the International Maritime Organisation earlier this month, could also save the shipping industry US$5 billion in fuel costs and cut carbon dioxide emissions by 20 million tonnes a year on new ships by 2020, said Peter Boyd, chief operating officer of the Carbon War Room, an NGO set up by a group including British billionaire Richard Branson.

Boyd said the IMO’s new rules would lead to fuel savings of US$50 billion a year and an annual reduction in carbon dioxide emissions of more than 220 million tonnes if the standards were applied to the existing fleet of 60,000 ships.

Boyd was commenting after the IMO approved regulations to implement efficiency ratings for ships over 400 gross tonnes, which are expected to enter into force on January 1, 2013. The measure, which will apply to ships ordered after a specific date, was approved overwhelmingly by 48 countries that voted at the IMO’s marine environment protection committee about 10 days ago.

China was one of only five countries that voted against the measure. Consequently, while mainland shipyards are likely to build more energy-efficient ships for foreign owners, there will be no pressure on those shipyards to comply when building ships to be registered in China for mainland owners such as China Ocean Shipping (Group).

Clauses in the pact allow countries to delay implementation for up to four to six years after the commencement date of the rules. As a result, there is some uncertainty over how quickly the energy-efficiency design index and the associated energy efficiency management plan will be implemented.

Under the IMO regulations shipowners will have to meet the new efficiency ratings for each type of vessel they order. Dry cargo bulk carriers will have a different rating than tankers or container ships.

The IMO also leaves the choice of technologies used in a specific ship design to the maritime industry. This could include changes to the hull design or propulsion system which are already being incorporated by some shipowners, including Hong Kong operators.

Asked if shipping companies would seek early compliance with the ratings or take advantage of the potential delay given to some countries, Arthur Bowring, managing director of the Hong Kong Shipowners’ Association, said: “It really depends on the cost of compliance. Shipbuilders might try to ask for a premium [on the cost of a new ship] to implement early because it is not yet required by regulation.”

But Bowring said the industry was “suffering an overcapacity of shipbuilding and so the cost might well be absorbed, at least partially”.

“Whether flag states will take advantage of the four-year delay could well be a political decision to object to the process rather than anything else,” Bowring said. He also thought it was “actually in the owner’s interest to have the energy efficiency design index for his new buildings, in that it should make the ship more attractive as a sale candidate later on.”

Tim Huxley, chief executive of Wah Kwong Maritime Holdings, which operates a fleet of tankers and dry cargo ships, said it was too soon to assess the impact of the regulations on its operations, “although it will obviously have an impact on any new ships we might build in the future. The interesting part is going to be how quickly the shipbuilding and engine manufacturers respond.”

One Hong Kong shipowner said vessels were designed to have a lifespan of 25 to 27 years, but the impact of the IMO regulations meant that some ships being delivered now could already be obsolete.

Jan Rindbo, chief operating officer of Pacific Basin Shipping (SEHK: 2343, announcements, news) , said: “We are supportive of the creation of sensible but effective industry-wide measures to reduce emissions, and for such measures to be the jurisdiction of the IMO.”